The best thing about home equity loans is that they have lesser demands as to how many loans you can borrow. As long as you don’t owe more than your property’s value, there’s no limit to the number of home equity loans you can have at one time. This means you should never be afraid of acquiring a new home equity loan if you are faced with an emergency.
Having enough equity that aggregately meets the lender’s requirements is just but one way to guarantee access to multiple home equity loans. If you own multiple homes or any other property value, you can also have as many home equity loans as you can qualify for. The deciding factor only rests in the available valued equity of the guaranteeing properties.
Securing Another Home Equity Loan with The Same Lender
While there are many financing solutions, especially in BC, some people are used to being faithful to one lender. It could be probably due to friendly credit terms or a long-existing relationship that is mutually beneficial.
Well, you can still secure another home equity loan with the same lender, even as you continue servicing the already existing one. However, there’s a limited guarantee as to whether your lender will provide you another loan. This explains why it’s safe to consider other lenders such as private lenders Vancouver if you must secure another home equity loan.
On the other hand, some lenders in Vancouver, such as home equity loan BC, are more receptive to the idea of having a home equity loan and a home equity line of credit(HELOC)on the same property. The only problem is that you may be forced to pay higher interest rates to account for the lender’s added risks.
Qualifications for Another Home Equity Loan
While having more than one home equity loan is possible in BC, not everyone qualifies for the same. That’s why lenders will evaluate the following factors before considering you for an additional home equity loan.
Your Ability to Repay
This is one of the first things every lender seeks to find out from the borrower. Therefore, home equity lenders will be also interested in confirming your ability to repay if you request for more loans. They’ll look at things such as;
- Debt-to-income ratio
- Any proof of assets to guarantee your loan
- Your overall income information
Your Credit Qualifications
Credit scores are one of the bare minimums when sourcing for a second home equity loan. Most of the top lenders work with a minimum credit score ranging from 620 to 700. This may be a huge blow, especially to someone who asks; can I get a home equity loan with a 500 credit score?
Additionally, you’ll only enjoy the best interest rates and terms if your credit score is from 720 and above. Sometimes, higher credit scores may be a necessity if you have a substantial Loan-to-Value ratio.
Additional financing is a common practice, especially for those in property development. That’s why most lenders allow additional borrowing, even if you still have other existing loans. While this is welcome news for anyone wishing to secure more financing, it’s always safe to check your borrowing culture to avoid running into unmanageable debts.